/ Money

Do you want to save the cheque?

Writing a cheque

It’s official – cheques are going out of fashion and plans are in place to wipe them out completely by 2018. However, one MP is arguing that the elderly still depend on them, so do they still have their place in society?

When was the last time you wrote a cheque? In a shop; to pay a bill; or maybe to pay a tradesman or friend?

For me, it’s most definitely the latter. I can’t remember the last time I took my chequebook shopping (I can already hear the disapproving tuts as I hold up the queue) and I pay all my bills by direct debit. But when it comes to repaying friends or tradesmen, the chequebook still has its place.

This is an argument one of our readers, Malcolm Murray, wrote to us about. ‘If a plumber does a job for you they expect to be paid on completion, but don’t have any facility to deal with payment by card,’ he told us. ‘So unless we keep large sums of money available, a cheque is the only practical method of payment.’

How cheques went out of fashion

The plan is for the Cheque Guarantee Scheme to be phased out completely by mid 2011 and for cheques to be made obsolete by November 2018. The Payments Council, which monitors payments in the UK, says these decisions follow wide consultation and research that shows ‘cheque use is in long-term, terminal decline’.

Strong words, and the Payments Council’s figures do back this up. There were just over 3.5m cheques issued each day in 2009, compared to 11m in the peak year, 1990. I don’t think 3.5m is a figure to be sniffed at, but it is put into perspective when compared to the 30.2m transactions made on UK cards every day in 2009.

The fight to keep cheques alive

But while there’s no denying that chequebooks have been usurped in the popularity stakes, there are still people who rely on them, not least the elderly. This is an argument that’s been getting some press of late, thanks to support from MP David Ward.

He’s been arguing that the 2018 cut-off date is wrong and would be detrimental to older people. He’s not wrong – those under 25 receive on average only two cheques a year, while over-65s get four. And as many elderly people have no access (or understanding) of the internet, cheques can be a safe and easy way for them to pay bills.

But it’s not just the elderly who will miss their paper friend – many of you raised concerns about a cheque-free world when we ran a Conversation back in July. “If the threatened death of the cheque book comes about, how are we expected to pay for things? Wodges of cash? That’s asking to be mugged,” fumed Ann Hay.

Others, like i_steven, were more concerned about how banks will benefit. “The banks will get their own greedy way again and again once they have forced us to pay larger amounts by card,” he said.

For now, the 2018 date remains in place, although the Payments Council has responded to David Ward, saying they’ll only go ahead with the date ‘if we’ve been able to ensure that alternatives have been identified, are accessible and are actually being used’. Is that good enough for you, or do you have concerns about a life free of chequebooks?

Should we get rid of cheques?

No, I still find them useful (92%, 1,229 Votes)

Yes, they're not relevant any more (8%, 109 Votes)

Total Voters: 1,338

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Hector Macduff says:
22 January 2011

I use cheques as little as possible as they are a security risk. You are giving to someone, who possibly knows your name, address telephone number(s), car registration and even DOB, a piece of paper showing the name and address of your bank, sort code, account number and account name. ( where I live they probaly know my mother’s maiden name!)A recipe for identity theft!

worried says:
23 January 2011

I use my chequebook regularly for paying tradesmen and mail order accounts. Many small firms do not accept credit/debit cards as the equipment is too expensive. I also find cheques useful for sending as presents.I also pay subscriptions to clubs etc. by cheque. Why change a system which works perfectly well for a majority of people?

Nick Smith says:
24 January 2011

I am very concerned about the phasing-out of cheques. I am not aware that any viable alternative has been proposed. I use about 60 cheques a year for payments to charities, societies, small businesses and family.

Gillian Lumb says:
24 January 2011

My husband and I use cheques regularly to pay for social events eg local musical concerts, dinners and quiz nights. How are these local choirs, music societies, WEA, film societies, etc supposed to collect their money without cheques. Also I pay my hairdresser who comes to my house by cheque.
What worries me most is that our daughter has just set up a small business publishing a magazine which she produces and edits. She needs people who take out postal subscriptions to be able to pay by cheque. Many of her subscribers are not computer literate and so cannot use Paypal. The government is supposed to be encouraging small businesses so they should tell the banks not to demolish the cheque system.

I had an interesting conversation with the bank manager when we recently went to start up a new current account. We checked first to see that cheques books were still being issued with this account. He said yes but then went on to tell us (as if we didn’t know) that they were going to be phased out. I asked how would a housebound elderly person with no internet access get cash to pay tradesmen or anybody doing their shopping for them, presumably they’d have to give the carer/homehelp their card and pin number and trust to luck? How doe that person get money, to presumably stockpile under the bed? He said that there weren’t people like that, they were in residential care! We could not believe the naivety of this man – he really thought it was that easy to get into residential care and there couldn’t possibly be people in this sort of situation. Having worked with elderly and disabled people most of my working life, I could assure him that he hadn’t got a clue about real life. And isn’t that the problem with the whole ditching of the cheque book – they don’t know how normal people live – as with other aspects of banking, they don’t get it.

Ah well

All I can really say is Vote Labour – and get them to reverse the decision.(they’re not the bank’s buddies)

I want to keep the cheque – I still use them for tradesmen.

One point about the comparative numbers of transactions – they are not really comparative – I use my credit card for a great vmany small transactions (as it then lists the payments) – But cheques are only used for larger payments.

Pam Temple says:
1 February 2011

Our local choir relies on cheque payment for subscriptions, payment of professional musicians, hall hire, and for general fundraising acitivities. We are a charity, and neither we, nor those we deal with, can afford to run card machines. We are concerned about how transactions will be managed in the future as we see no practical alternative to cheques.

It is perhaps worth re-iterating here that what is probably the first step towards phasing out cheques is now imminent – the abolition of the cheque guarantee card is scheduled for 30th June which is only just round the corner.
Even this initial step is going to hit small businesses etc hard – no doubt we can expect more ‘bounced’ payments. πŸ™
I hope Which? will continue to lobby hard in this matter – it certainly appears from the comments posted that the general public (who are after all, the banks base customers) do not want to see the demise of the humble cheque!

dwaine steffes says:
1 February 2011

I am in favour of keeping cheques for all of the reasons mentioned by others. But I would like for Which? to ask bankers to answer the points raised. What are the alternatives to cheques that would fulfull all the tasks that cheques perform? How about petitioning the government?

Knightie says:
3 February 2011

We run a small antiques business selling about 6 times a year at fairs, we cannot justify the cost of a card reader. Cheques are our lifeline and we need guarantee cards to be valid too. Losing cheques will put us out of business.

felicity s says:
13 February 2011

Cheques should not be phased out.
Like many of your respondents, I use cheques particularly to pay local tradesmen, repay friends, and often to donate to charities. Elderly people certainly need them. I work with a lot of small businesses and charities and they all use cheques more than any other means of payment.

I wrote and complained to the relevant authority and was told that they would not be phased out until and unless there was a viable alternative. What is that likely to be and who decides if it is acceptable?

Peter says:
23 February 2011

I strongly support the need to keep cheques. I use cheques to pay local tradesmen, pay for my membership to local clubs, send presents to relatives who live far away and for all my charity donations.

I cannot see a viable alternative which would not cause me or the recipient extra costs. Like other comments I have seen in this Conversation, I feel that the only people who want this to happen are the banks themselves because they see yet another opportunity to generate more profits.

Mike Walsh says:
23 February 2011

The Banks have not yet introduced an alternative to the cheque that meets the needs of several important groups of people (see later).
Even if they were to do so this year, it is unlikely that it would achieve the required level of testing and user confidence in time for the required date for a decision not to postpone the 2018 date for removal of cheques.

I fully support the banks wish to continue to reduce the volume of cheques being used. However, the banks should be promoting the current alternatives with fair handling charges, or no handling charges, and they should be required to heavily penalise those business customers who make a charge, especially an extortionate charge, when such alternatives (often plastic) are used. (ref another discussion at the moment).
The banks use of threat to remove the cheque is not a wise alternative.

For the following situations, and no doubt several others, a cheque or cheque substitute, is and will continue to be important :
1. Personal gifts, not always from grandparents,
2. Other private transactions, where the recipient is not in business, and unable to accept card payments,
3. New Business start-ups where (even today) banks can take months not weeks to authorise and provide facilities to accept card payments.
4. Payments to Clubs, Societies, and other small organisations where the regular payments might be handled by standing order or Internet payments, but the ad-hoc, visiting guest, and last minute payments, cannot work that way.

And if some such cheque substitute thing is needed, Why oh Why re-invent the wheel. The cheque is here. it works, manage the processing cost by scaling down the volume and promoting other methods,

PERHAPS, we should show banks what the future looks like by picking a month and agreeing that instead of cheques, we will ALL write personal letters to our bank manager, requesting him or her to make a payment, on this day, of Β£xx to the account at ZZZ bank of Mr. AAA who lives at BBBBB address !

Tell the manager that if banks persist with this stupidity, we shall be left with no alternative but to handle all our business in this old fashioned way!

N G Morton says:
29 March 2011

The idea to phase out payment by cheque is ludicrous. Those businesses who have ceased to accept cheques and the proposal to withdraw the cheque guarantee card are deliberate intentions to drive even further down the number of cheques in circulation and the service providers are simply ignoring the wishes of those who use the service because it suits the provider and not the customer.

C Steel says:
11 April 2011

As a small farmhouse B&B cheques are essential for deposits and also final payments for many people. It is uneconomic to have machines for credit and debit cards for us as a very seasonal establishment with limited rooms. Since the cheque guarantee card will no longer be valid after the middle of the year we have to take the risk of bouncing cheques – what solution? keep cheques as they are now.

Also can I have a beef about Santander – their faster payments service is appalling – a maximum of Β£300 when all the other banks are far more. Can we have a major campaign to bring them into line?

My last thoughts on this – I am an Internet user so I can easily pay another Internet user a small cash payment – through PAYPAL – provided the user has a paypal account – but it is not free unless the seller uses the cash to buy something else on the Internet.

But Cheques must stay – It is the only easy system (except cash) to transfer money to someone else who hasn’t a chequeing account. I have often made a cheque out to “Cash” and the recipient has no problem obtaining the money from a bank.

In my local shopping centre I often see shoppers pay by cheque – The majority of these are not old but in their mid 30s.

Like others I help run a charity – we accept cheques or cash only – not credit or debit cards. It may be of interest to note the “donations” are always larger when we are paid by cheque – and we need every penny we can get.

Why should we suffer???. .

To phase out cheques is very short sighted, it is only being done to increase the excesive bank profits and bonuses being paid to the chief exectives and senior management in retail banking. This is the same as when they stopped the Saturday opening of Banks.

I for one use a mixture of payment methods, mainly credit cards but write as many as 10 cheques a month to pay various utility companies and other parties. The claim by banks in general that ATM’s are “foolproof” is not true, they are not secure in anyway, one should only use an ATM located inside a bank, outside is totaly insecure. There is proof that internet banking is not 100% secure, only the service that is provided by Barclays Bank gets a “clean bill of health”, all other internet banking service providers are suspect.

Without foolproof alternatives to cheques they should leave cheque and cheque bank cards alone, they the BANKs should live in the “Real World” and understand that they are not providing any viable alternative to cheques especialy to those who do not understand or have access to online banking.

nytram says:
18 April 2011

we should not let the banks bully us how we want to pay for things just because it will save them money. we have a right as customers to protect the cheque. pensioners have been bullied into having their pensions paid into banks etc, lets stop this now. stand up for your rights

Fiona Mac says:
26 April 2011

As a mum I use cheques regularly – dinner money, Brownies subs, school trip costs, Pack holiday, club events, deposits for holiday clubs (especially those run by after-school activity providers eg: Dancing club, Karate club – not the professional childcare providers’ courses), paying window cleaner – none of whom accept credit/debit cards. My husband uses them to pay credit card bills as he doesn’t telephone or internet bank. Many of my payments could be in cash – but often they have to be the exact sum which can result in raiding kids’ piggy banks for change, and I don’t usually carry lots of cash as it ‘disappears’ more easily than a cheque is written. Cheques are often preferred by organisations who may refund the deposit if the activity doesn’t go ahead.

Supernan says:
6 May 2011

Cheques are just there they are a way to send and receive money for presents there are many people that I know that are NOT comfortable with internet banking etc etc
Thats the problem with the UK they want to dismantle all familiar things ! WHY